Discrimination in Markets

"You tell the trucking company that we have to service our customers. If they're not gonna help us, we're gonna find somebody who will."
--Brantley Foster (The Secret of My Success)

Some people argue that a producer should not be able to discriminate between customers. A baker, for example, should not be able to make a wedding cake for one couple while refusing to make a wedding cake for another couple. If a customer is refused service, then the strong arm of government should be applied to force the issue.

Proponents of this approach face several questions. Why isn't this situation akin to slavery? Slavery involves forcing individuals to produce output for others.

Furthermore, if it should be illegal for producers to discriminate between customers, then why shouldn't the opposite be true? Shouldn't customers be barred from discriminating between producers? If, for example, a buyer does not care for a seller's policy on making bathrooms available to the public, then why should that buyer be allowed to discriminate by boycotting that seller and/or taking business elsewhere?

The solution on both the buyer and seller sides is to remove government intervention from the equation and permit peaceful discrimination of all types. Indeed, markets operate on the basis of peaceful discrimination. Economic actors must prioritize, choose between alternatives, and cope with trade offs. This can only be done effectively through processes of discrimination.

If those processes of discrimination lead to bad decisions, then no government force is necessary to correct them. Poor discriminatory processes are sanctioned naturally by economic forces. A baker who refuses a customer loses business. A customer that boycotts a producer foregoes valuable products.

Because poor discrimination dents people's wallets, it causes people to think twice about perpetuating those unwise decisions. It also creates opportunity for entrepreneurs to better satisfy needs that have gone unmet in the past.

When not subject to violent intervention, discrimination in markets facilitates natural learning and improvement.